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While millions of American children are away at college, are you aware how rapidly their credit card debt is growing? From the time they arrive on campus until graduation, students’ overall credit card debt doubles. Amazingly, college students hold an average of four credit cards. And while student credit card debt averages over $2,700, more than one in five students are burdened with credit card debt up to $7,000. That’s on top of their average student loan balance of almost $20,000. Given the current entry-level job market, chances are this excess debt is more than most students will be able to pay off anytime soon. It’s no coincidence that bankruptcies among consumers under age 25 have soared 50% since 1991. As today’s students take on more debt because of higher tuition and endless credit solicitations, this new generation has been labeled “Generation Debt.” But don’t place all the blame on the students. Some campus credit card vendors make applying for a $10,000 credit line as easy as filling out a sweepstakes entry – and just as attractive, with free gifts for signing up. Yet credit card vendors are not entirely at fault either. There’s nothing inherently wrong with giving students access to credit. What’s wrong is that most students don’t get access to financial education. Every year, high school graduates are sent into the workforce or to college with no financial education. Two-thirds of high school seniors fail the basic financial literacy test from the Jump$tart Coalition for Financial Literacy, scoring an average of 50 out of 100. Most college students don’t know how to balance a checkbook, much less manage their credit. They don’t know that by making the minimum payments on their $2,700 in credit card debt, they won’t pay off that debt for 15 years! This lack of financial literacy will haunt them the rest of their lives. Financial burdens often cause academic and psychological problems. An Indiana University study found that debt is the reason for many dropouts, as students quit school to work full-time. In extreme cases, Iowa’s Attorney General found that anxiety over credit card debt compelled several students to commit suicide. These tragic cases have prompted lawmakers to consider the costs of financial illiteracy. Nearly half of U.S. states have passed laws to study the effects of credit cards on college students or to limit credit solicitation on campus. But as a federal financial regulator and a parent, I believe we need to do more. Financial education should begin in elementary school. Early knowledge about saving and spending is as important – and as easy to learn – as addition and subtraction. Financial education should advance through middle school and high school. Budgeting and credit management are practical, lifelong concepts that would fit into mathematics and home economics courses. In many communities, credit unions are sending counselors into schools to serve as classroom volunteers and guest speakers. Many credit unions also underwrite the costs of financial education workbooks and teaching materials. Some credit unions are even opening branches right in the schools, with student interns gaining real-life experience as tellers. But there is no final exam for financial literacy. As consumers, we never graduate. We must always keep learning. So credit unions must keep teaching. As members continue to learn, financial education programs can evolve – from basic savings and credit counseling to more sophisticated areas such as investment courses and financial planning. Financial education is a wonderful opportunity for credit union staff and volunteers to get outside their credit unions and into their communities. Credit unions are teaching financial literacy in many different venues – from community centers to homeless shelters, from military bases to corporate cafeterias. Since the U.S. Senate has declared April as “Financial Literacy Month,” I encourage all credit unions to review their financial education initiatives and do all they can to help members make life-changing choices and become smarter consumers. Credit unions can help the troubled students in “Generation Debt.” Moreover, credit unions can help all generations build wealth that will strengthen America’s future. And in so doing, credit union leaders can show lawmakers another important way that credit unions make a real difference in the lives of their constituents.

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